• Reviving safe-haven demand underpins JPY.
• Shrug-off weaker Japanese trade balance data.
The USD/JPY pair extended its consolidative price action through the Asian session and held with a mild negative bias near one-month lows.
The latest political development in the Euro-zone's largest economy, Germany, wherein Chancellor Angela Merkel declared failure to form a coalition government, was seen underpinning the Japanese Yen's safe-haven demand.
The news also offset disappointing Japanese trade data, coming in to show a surplus of ¥285.4 billion, narrower than the ¥330 billion expected, and momentarily dragged the pair below the 112.00 handle to its lowest level since mid-October.
However, a goodish pickup in the US Dollar demand primarily led by a sell-off in the EUR/USD major and despite weaker tone surrounding the US Treasury bond yields helped limit deeper losses, at least for the time being.
In absence of any major market moving economic releases, broader market risk sentiment would remain an exclusive driver of the pair's movement at the start of a new trading week.
Technical levels to watch
A follow-through weakness below the 112.00 handle is likely to find support near 111.70 level, below which the pair is likely to accelerate the fall towards mid-111.00s.
On the flip side, recovery attempt beyond 112.20 level could get extended towards an important hurdle near mid-112.00s, which if cleared might trigger a short-covering move towards 50-day SMA, currently near the 112.70 region.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.